On motions to set aside default judgments, the defendant presents the following factors: ability to present a meritorious defense; unfair prejudice; and whether the default was a result of culpable conduct. But under what circumstances must the trial court actually consider those factors? In Putnam County Memorial Hospital v. TruBridge, LLC and Evident LLC, So.2d (Ala. May 10, 2019), the Alabama Supreme Court answers that question.
The Supreme Court of Alabama reaffirmed requirements in the trial court for judges to review motions to set aside default judgments.
Recently, Alabama’s high court accepted the invitation to articulate the proper procedure for trial judges in reviewing motions to set aside default judgments. A hospital had contracted with TruBridge and Evident to handle some of the hospital’s operations and digital records. The hospital later developed a relationship with another company, HPI, alleged to have encroached on the contract between the hospital, TruBridge and Evident. TruBridge and Evident filed suit, but the hospital never appeared to defend. TruBridge and Evident took a default judgment against the hospital. After the hospital’s motion to set aside default was denied, the hospital found relief on appeal.
The trial court had not considered the Kirtland[1] factors when reviewing the hospital’s motion. Kirtland factors include the defendant’s ability to present a meritorious defense, unfair prejudice to the plaintiffs in setting aside the default, and whether the default was a result of the defendant’s culpable conduct. The intent behind Kirtland is to strike an appropriate balance between the needs of judicial economy and the rights of litigants to defend actions on the merits. The Court noted that while a trial court’s analysis of the Kirtland factors is not always required in response to a motion to set aside a default judgment, analysis is mandatory if the movant sets forth evidence and colorable arguments for each factor.
The hospital made threshold showings for each factor. That required the trial court to have expressly considered the factors in ruling on the motion. The Supreme Court remanded the case to the Mobile Circuit Court to consider the Kirtland factors.
Defaults happen. Even so, sometimes justice demands a trial on the merits. Putnam makes clear that timely motions to set aside must be considered by the trial court if the defendant clears the Kirtland hurdles with evidence and colorable argument.
Putnam County Memorial Hospital v. TruBridge, LLC and Evident LLC, So.2d (Ala. May 10, 2019).
Read the full opinion: https://acis.alabama.gov/displaydocs.cfm?no=944653&event=5HB0LFWRK
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[1] Kirtland v. Fort Morgan Authority Sewer Service, Inc., 524 So. 2d 600 (Ala. 1988).